Creating Buzz Online For New Products

Interesting study from Nielsen BuzzMetrics called The Origin & Impact of CPG New Product Buzz(PDF). After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, Nielsen found the best predictor of buzz for newly launched consumer packaged goods is a large advertising budget.

Well that was the lead paragraph in the Internet Retailer article, which went on to say:

The study evaluated nearly 80 new consumer packaged goods, or CPG, products across several subcategories, launched in the U.S. between 2005 and 2006. The top 10% of products with the most buzz averaged spending nearly $20 million on paid media for the launch. In contrast, the companies that generated the next 40% of blog buzz spent an average of $15 million, and the companies that generated the bottom 50% spent an average of only $5 million.

At first glance this study appears to say that word-of-mouth advertising as well as social and viral marketing does not have an impact on generating buzz about a new product. This is counter intuitive to what we know about social marketing. After delving a little deeper into the data the picture for social media marketing is not as gloomy as it first appears.

The study showed that 10% of brands accounted for 85% of total CPG buzz in the study. For example, over-the-counter drug brands have generated lots of comment, partly driven by consumers’ high level of involvement with them. Edgy brands were also among the top 10% of products with the most buzz.

“Most CPG products are ‘everyday’ items, lacking in distinction and therefore propensity for buzz,” says Kate Neiderhoffer, director of methodology at BuzzMetrics Inc. “However, there are some exceptions to the rule, as evidenced by brands like Red Bull, Altoids, Crystal Pepsi and Viagra. The CPG industry should challenge itself to bring more innovative products to market, cultivated with more innovative marketing. The buzz will follow.”

The data in the study was skewed by the number of “boring” CPG products. When you look at the CPG product launches where there was a well thought out social marketing plan and execution the results were very good.

A high amount of DTC (direct to consumer) ad spending can certainly help generate a buzz for a new product. However, the more successful brands like Red Bull, Altoids, Crystal Pepsi understand that to generate the most brand awareness they need a component of social marketing to make the product launch viral.